Picture: REUTERS
Picture: REUTERS

Power utility Eskom and rail, port and pipeline company Transnet have two weeks to respond to a forensic inquiry into irregularities in a coal tender awarded by Eskom to a Gupta-owned mine and alleged corruption in the procurement of locomotives by Transnet.

The Treasury said on Sunday the forensic investigation it had commissioned had been concluded and passed on to the two utilities for comment.

The draft report was on the alleged irregularities in the awarding by Eskom of a coal supply contract to Tegeta Exploration and Resources and Transnet’s procurement of locomotives from China South Rail.

At the time of the coal deal, Tegeta was owned by the Gupta family, who are close associates of former president Jacob Zuma and are accused of using this relationship to influence and win state contracts.

In August last year the Guptas sold the company (Tegeta) to Swiss-based Charles King SA for R2.97bn.

On Sunday the City Press quoted extensively from the Treasury draft report, which is not yet public.

Among other things, the newspaper said the draft report detailed the extent to which associates of the Gupta family looted Transnet and Eskom by means of contracts and that it contained information implicating former senior Eskom and Transnet officials.

There were also new details about a multinational advisory firm paying for at least one official’s travels to Dubai and Europe after the contract with Transnet was extended.

The Treasury’s investigation into Eskom’s coal agreements with Tegeta began in 2015. The investigation focused on the sale of Optimum Coal Mine by multinational resources firm Glencore to Tegeta in the same year.

Tegeta then clinched a multi-year contract worth billions of rand to supply Eskom with coal, without proper processes being followed in accordance with quality specifications.

In Transnet’s case, the state-owned enterprise had bought 1,064 locomotives in a R50bn deal. The train units were procured from China South Rail. The Chinese firm allegedly paid kickbacks to a Gupta-linked firm to secure the contract.

A spokesman for the Chinese embassy in SA refused to comment on Sunday.

The Treasury’s statement comes as China’s president Xi Jinping concluded a state visit to SA last week, during which he announced $14.7bn in investments in the country. Xi also attended the 10th Brics summit.

The allegations against Eskom and Transnet are also expected to come up at the judicial inquiry into "state capture" due to start next month.

"The report has been given to the relevant parties for comment," the Treasury said.

"These parties have been given two weeks to respond," the Treasury added, saying that the final report would be released publicly once it had reviewed all the comments.

With Reuters.